Most Canadians who spend a winter’s day thinking about Mexico fill their minds with images of seat sales, beaches and burritos.
But an American commodity trader recently told a room jam-packed with pulse growers to turn their thoughts to Mexico when contemplating chickpea prices.
“Watch Mexico very closely – it will set the stage for all other origins,” Paul Lambert told farmers attending the Pulse Days conference held earlier this month in Saskatoon.
The rapid growth of chickpea acreage in Western Canada has farmers keen to learn more about markets for the crop.
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Some analysts expect prairie chickpea acreage will double to about 1.3 million acres this year. Just five years ago it was 27,000 acres.
While Canada is now a major exporter, it is Mexico, which harvests in February and March, that sets the market’s tone.
If Mexican prices are high, other markets usually follow. If its carryover stocks are large, worldwide prices tend to fall.
Lambert said the 2000 crop harvested last March is virtually sold out. Traders have sold almost all of the 155,000 tonnes made available for export, but they took a beating doing so.
Unusual demand from India, Algeria and the Middle East caught Mexican exporters off guard. They had forward sold a lot of the 2000 crop but the new demand raised the market.
This created a dilemma for exporters who were faced with covering the less lucrative forward sales contracts. Many of them chose to default.
Lambert said those exporters will be cautious in 2001 and “ready to raise their prices at the drop of a hat.”
There has been very little forward selling of the 2001 crop. Lambert said only a “trickle” has been pre-sold for shipments in March and April.
A few months ago it appeared Mexico would have a huge chickpea crop Predictions of a 25 percent increase over the 2000 crop weren’t uncommon, but rainy weather in October and November led analysts to scale back their optimism.
Lambert said many growers reseeded their flooded fields with corn, but he thinks a lot of chickpeas went back in the ground too.
“I expect the 2001 crop to be more or less the same size as the 2000 crop or an exportable quantity of about 150,000 tonnes.”-20-
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But he said the adverse weather conditions might have shrunk seed size. Mexican farmers grow big chickpeas, often 12 millimetres and larger.
“The sizes are immensely popular in Spain, Italy and Algeria and even countries such as Turkey and India are importing the large caliber chickpeas,” said Lambert.
Three other key regions for Canadian producers to monitor are Turkey, India/Pakistan and Australia.
Turkey had an abysmal year in 2000, producing only 70,000 tonnes of chickpeas, down from 1997’s crop of 281,000 tonnes.
The country went from being a large exporter to a net importer of chickpeas because excessive heat fried its crops.
“This important shortage in Turkey was a godsend to Mexico, Canada and the U.S.A.,” said Lambert.
Turkey usually provides fierce competition for Canada because both nations export the same caliber of seed – eight mm and nine mm.
Lambert said most analysts believe Turkey will be back on track in 2001.
Pakistan and India will be interesting variables in 2001. Together, the two countries import about 400,000 tonnes of desis and up to 70,000 tonnes of kabulis each year.
Pakistan stays away from Canadian desis but there are tremendous opportunities for desis in India due to production problems in Australia.
Lambert said October and November 2001 will be a critical period for Canada and Australia to do business with India.
“Whoever can ship first will certainly have the advantage and Canada may have the opportunity of selling over 150,000 tonnes of chickpeas immediately after harvest.”
But if prices get too high, India will substitute yellow peas for chickpeas.
Australia is the other region chickpea growers should keep an eye on.
Heavy rains and floodwaters destroyed much of the 2000 crop Production estimates of 250,000 tonnes of desi chickpeas have dropped as low as 100,000 tonnes -20-
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There will be a lot of feed and sample grade product coming out of Australia.
Lambert said it’s a little too early to get accurate data on Australia’s 2001 crop but most believe the desi crop will be in the range of 150,000 to 200,000 tonnes.-20-
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In his concluding remarks, Lambert told producers to look for a winter of volatility, with production in India, Australia and Turkey still in a state of flux.
He also said demand for chickpeas will be “awesome.”
